Sundance enters agreements on infrastructure

Sundance Resources
has signed an agreement with a third fellow iron ore explorer to look at sharing infrastructure in West Africa and is talking to others as it nears the deadline for its $1.65 billion takeover by Hanlong Mining.

Sundance said yesterday it had entered an infrastructure-sharing “memorandum of understanding" with Equatorial Resources, having negotiated similar agreements with Core Mining and Legend Mining.

Among other iron ore assets in West Africa, Equatorial owns the Badondo project, 90 kilometres south-west of Sundance’s Nabeba deposit and 90km south of a proposed rail alignment in the Republic of Congo.

Sundance plans to build the rail link from Nabeba to its Mbarga deposit across the border in Cameroon and then some 500km to a new deepwater port at Lolabe on the Cameroon coast.

The infrastructure is expected to account for almost $US3 billion of the overall $US4.7 billion project cost. The twin mines at Mbarga and Nabeba will account for the rest.

Sundance chairman
George Jones
told The Australian Financial Review yesterday the company’s aim was to spread some of the cost of the project by getting other users on board.

“If that can be shared amongst three or more, it’s a cheap value-add to upgrade it to take the additional tonnages and charge a tariff if that’s what they want to do," he said.

“We’ve always planned for it to be able to handle about 100 million tonnes a year and I can join the dots together where that’s achievable over the next . . . it will take three to four years to build it all."